A Contemporary Analytical Study of CAMELS Indicators and Financial Performance Variations among Indian Public Sector Banks

Abstract

This research presents a comprehensive comparative analysis of five leading Indian Public Sector Banks: SBI, PNB, BOB, IOB, and UB, covering the period from 2019 to 2024. It utilizes the CAMELS framework and employs statistical tools such as ANOVA and Bonferroni post-hoc tests to examine year-wise variations and the significance of various parameters. The findings reveal that Bank of Baroda outperformed its peers, achieving the lowest average CAMELS rank of 2.00, which reflects a strong capital position and effective management. Union Bank followed with a rank of 2.50, driven by the highest Liquidity Ratio of 64.14% and a superior Gap Ratio of 97.76% in terms of sensitivity. SBI was ranked third with an average score of 2.67, while PNB had the lowest average rank of 4.17, indicating concerns regarding asset quality and earnings. Despite the visible performance variations among the banks, ANOVA results indicate no statistically significant differences (p > 0.05) across the years and parameters, suggesting relative stability in the performance of public sector banks. The study concludes that while certain banks have demonstrated financial strength, others need to focus on improving risk sensitivity, asset quality, and earnings. The CAMELS-based evaluation provides critical insights for policymakers, regulators, and stakeholders aiming to enhance the resilience and governance of India’s public banking system.